In This Article:
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AUM Growth: 20% year-over-year, reaching INR 184 billion.
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Net Profit Q2 FY25: INR 1.48 billion, a 22% increase year-over-year.
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Disbursements Q2 FY25: INR 12.94 billion.
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Disbursements H1 FY25: INR 25.05 billion, an 8% growth year-over-year.
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Net Profit H1 FY25: INR 2.2 billion, an 18% increase year-over-year.
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OpEx to Asset Ratio H1 FY25: Improved by 40 basis points to 3.25% from 3.65% in H1 FY24.
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1+DPD: 3.97%.
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Gross NPA: 1.08%.
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Credit Cost Q2 FY25: 11 basis points, improved from 20 basis points in Q1 FY25.
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Borrowings H1 FY25: INR 25.7 billion at 8.42%.
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Average Borrowing Cost: 8.15%.
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Portfolio Yield: 14.04%.
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Net Interest Margin: 7.7% of total assets in Q2 FY25.
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ROA Q2 FY25: 3.49%, an 18 basis points improvement year-over-year.
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ROE Q2 FY25: 14.8%, a 77 basis points improvement year-over-year.
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Net Worth: INR 40.48 billion.
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Total Live Accounts: Approximately 29,000, a 15% growth year-over-year.
Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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AAVAS Financiers Ltd (BOM:541988) reported a 20% year-over-year growth in Assets Under Management (AUM), reaching INR 184 billion.
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The company achieved a net profit of INR 1.48 billion for Q2 FY25, marking a 22% year-over-year increase.
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Disbursements for Q2 FY25 amounted to INR 12.94 billion, contributing to an 8% year-over-year growth in H1 FY25.
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The company successfully raised INR 6.3 billion through Non-Convertible Debentures (NCD) from IFC, the largest debt fund raised by the company to date.
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AAVAS Financiers Ltd (BOM:541988) maintained strong asset quality with 1+DPD below 4% and Gross Non-Performing Assets (GNPA) at 1.08%.
Negative Points
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The company experienced a sequential drop in spread by 11 basis points due to increased cost of funds and yield compression.
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Disbursement growth was affected by an extended monsoon and regulatory changes, leading to lower fresh disbursements.
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Operating expenses remain a concern, although there was a slight improvement in the OpEx to asset ratio.
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The company's spread fell below 5% for the first time, attributed to rising borrowing costs and yield compression.
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There was a 30 basis point increase in 1+DPD, attributed to seasonal factors like extended monsoon and festive season.
Q & A Highlights
Q: For the first time, the spread fell below 5%. What is happening on the asset yield side, and how do you plan to address this? A: Sachinderpalsingh Bhinder, MD & CEO, explained that the cost of funds has increased, and there is a lag in adjusting disbursement yields. The company is focusing on increasing disbursement yields by 25 basis points and expects spreads to stabilize between 4.8% to 5% for FY25.